By Cheryl James News Dealing with the skills gap in South Africa 29 Oct 2012 Like the UK, there is little correlation between the university system and the job market in South Africa. Cheryl James, CEO of Fasset, outlines some of the issues with the education landscape and the initiatives that have been put in place to help tackle youth unemployment. Like the rest of the world, South Africa has a huge challenge in tackling youth unemployment. A high proportion of young South Africans do not complete their education. For example, of the 1.2m children who started in 1999 – a process which should take a minimum of 12 years to complete – only 364,513 (29.8%) had successfully completed and passed high school by 2010. The harsh reality is that only four in 10 of those that go through the high school system and successfully pass are likely to find employment. Our education system is simply not providing them with the necessary skills to enter the job market or to go into further education. Ironically, despite skills shortages, there are currently 300,000 unemployed graduates in South Africa. Like the UK, there has been little correlation between the university system and the overall job market. A large amount of young people have softer skills, but we have a deficiency in core subjects like mathematics, finance, accounting and sciences. A global problem of university courses being led by demand rather than the job market. Currently very small proportions of those in the high school system study mathematics, or obtain the necessary marks in the subject, to pursue careers in finance, accounting or engineering. Last year the average pass rate for mathematics, physical science and accounting was between 32-35%. Of those who passed, only one in 10 obtained 50% or higher and only 1.6% obtained a distinction. The Minister of Higher Education and Training, Dr Blade Nzimande, recognised this earlier this year in the Green Paper for Post-school Education and Training. Major improvement must be made to post-school education and training, quantity, diversity and in some instances, quality also must be addressed. More recently, a report in August by ADCORP (an authority on the South African labour market) informed us that there are 829,000 unfilled positions for high-skilled workers across a range of occupations in South Africa. The Government has reacted by ‘pulling out the stops’ to address the problem. Education receives the lion’s share of the 2012/2013 (roughly R207bn) budget. How South Africa is dealing with the skills gap While the skills gap in South Africa is big, inroads are being made. The National Skills Development Strategy was developed in 2000 to address skills shortages across all sectors of business. More than 20 Sector Education and Training Authorities (SETA) were established tasked with facilitating skills development within their specific sectors. Employers are now being rewarded for developing their employees’ skills by way of tax incentives across both public and private sectors. Employers, who contribute to the Skills Development Levy, are rewarded by access to mandatory grants, which enable them to recoup 50% of their Skills Development Levy. There is also the National Student Financial Aid Scheme (NSFAS), which provides student loans to deserving students with the potential to succeed at university or further education colleges and training providers. In addition, student enrolment at universities has increased 4.2% per year on average since 2000. The Green Paper mentioned above seeks to create a policy framework that will enable the Department of Higher Education and Training (DHET) to create an accessible, equitable and affordable post-school education and training system. This system is designed to improve education for all sections of the population, and provides free education and training for the poor. The DHET’s vision is to create a Further Education and Training (FET) system that offers high quality education by FET colleges throughout the country. In effect, the system will empower all graduates to address the needs of the economy and the country and equip them with the skills to allow for a productive, flexible, innovative workforce in a fast changing economy. These developments predict well for the future. While the foundations are being laid to equip South Africa with the skills, it will take a number of years before South Africa enjoys the fruits of success. As for the Finance and Accounting sector, considerable progression has been made over the past 12 years. During the past financial year alone, 19,561 individuals were up skilled through Fasset learnerships, Fasset-funded development projects and Fasset’s lifelong learning events. Collectively, 123,392 individuals have completed, benefited from or attended these initiatives since 2000. These achievements confirm that Fasset has embraced Dr Blade Nzimande’s directive to make every workplace a training space that addresses skills within finance and accountancy. You can read more about AAT’s work in South Africa on its dedicated blog, Voice of AAT (SA). Cheryl James is a writer for AAT Comment.